Netflix to charge extra fees for extra users in 2023
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The latest development in Netflix’s plans to dissuade account sharing has surfaced via a quarterly earnings letter. It reveals extra charges for each separate user on the account of the owner, that isn’t from the same household, starting 2023.
While the final rates have not been officially announced, what we can infer from the document is that the charge will be up to a quarter of the initial basic rate. That would result in about a $3-4 charge per user outside of the household.
Netflix began its crackdown on unauthorized account sharing earlier this year. What started with tests of account verification in the style of 2FA (2-factor authentication) and device count limitations ended with the creative workarounds as provided by the Internet.
The tests had caught the attention of many users online, some of whom even shared their plans on how to circumvent the possible limitations via tricks as simple as “I’ll just text them the verification code”, while others provided their own take on solutions that Netflix should adopt.
We can’t say if the Internet’s reaction had an impact on the decision, it was clear that a change of plans was needed. After all, Netflix’s estimated loss from account sharing is around the $6 billion mark, as per Citi analyst Jason Bazinet. From Netflix’s point of view, that is a sum that should flow in naturally from actual user subscriptions.
While that does seem fair, let’s check in with Netflix’s competition:
“We can’t say if the Internet’s reaction had an impact on the decision, it was clear that a change of plans was needed.”
- HBO Max doesn’t have any limitations
- Disney Plus limits the amount of devices connected to the account
- Amazon Prime Video requires users of shared accounts to be within the same country or region
How these will measure up against Netflix’s decision will become clear once we truly find out how the term “household” is defined and when the penalty is live.
Netflix is still the major player on the market with over 220 million active users. Now, imagine if account sharing would cease? Those numbers would jump significantly, with a doubtless positive business effect, given Netflix’s recent financial troubles.
It’s worth pointing out that the company is also making it easier to detach your profile from a shared account. Earlier this month, Netflix announced a profile migration tool, which allows users to keep their settings when creating their own subscription.
Also, set to release in November, is a cheaper, ad-supported plan for $6.99. All of these announcements point to Netflix trying to gently nudge users into creating separate accounts, instead of sharing.
Regardless of financial reports or planned actions, at the end of the day, Netflix are the trendmakers of the video streaming scene. Their actions are sure to stir up the market and it would be interesting to see how competitors react to Netflix’s decision.
Questions & Answers
Q.When will Netflix begin charging extra fees for users outside the account owner's household?
When will Netflix begin charging extra fees for users outside the account owner's household?
Netflix plans to start charging extra fees for users not residing in the same household as the account owner from 2023. This information was revealed in a quarterly earnings letter.
Q.What is the estimated cost of the extra fee for additional users?
What is the estimated cost of the extra fee for additional users?
The charge for each extra user outside the household is inferred to be up to a quarter of the initial basic rate. This would result in an estimated charge of around $3-4 per user.
Q.How much money does Netflix estimate it loses due to account sharing?
How much money does Netflix estimate it loses due to account sharing?
Netflix estimates a loss of around $6 billion from account sharing, according to Citi analyst Jason Bazinet. This sum is seen as potential revenue from actual user subscriptions.
Q.What new tools has Netflix introduced alongside these changes?
What new tools has Netflix introduced alongside these changes?
Netflix recently announced a profile migration tool, allowing users to transfer their settings when creating new subscriptions. An ad-supported plan for $6.99 is also set to be released in November.
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